Did you know that renting laptops can be 20% cheaper than purchasing?
Most companies think that the only time you lose money on acquiring a laptop is when you purchase the device. You meet with your supplier, you negotiate terms, then you pay the price that was agreed upon. However, did you know that the costs don’t stop there? Down times, I.T. managers’ salaries, parts and maintenance, are just some of the hidden costs of purchasing a laptop for your company. To give you a better perspective, let’s set-up a theoretical company that's planning to acquire 10 laptops to see what these hidden costs are.
Typical assumed costs
Numbers of Laptops - 10
Number of Managers - 1
Salary Per Manager (Yearly) - $15,000
Laptop Cost - $1,090
Yearly Maintenance Costs (as % of laptop cost) - 5.0%
Down Laptops Per Year (as % of laptops) 10%
Down time per laptop (days) - 8
Value of Down Employee ($/yr) - $20,000
Seen above would be some of the numbers that we will use as an approximate for the business’ expenses. The cost of the laptop that they are purchasing will be worth $1090 (price of a Macbook Air), and the yearly maintenance cost of that would be 5.0%. Having a laptop workforce in your company would also demand for an I.T. manager to manage the numerous laptops in your company. Let’s also approximate that the average down time would be 8 days per year and that employee is worth $20,000 per year for the company.
Understanding first-year costs
This is what it would look like for your first year. Your company will be spending $10,900 on laptops. To add to that, the company would have paid the I.T. manager for the year an amount of $15,000. Parts and maintenance aren’t that hgh yet since brand new laptops haven’t been worn out yet. Having 8 days of downtime from your laptops would have cost the business approximately $613. In total, purchasing laptops would have cost the company a whopping $26,513 for the first year.
Understanding three-year cycle costs
Seen above as well would be the breakdown for the second year and third year. Yes the laptops have already been purchased but the company would still incur the following costs. Of course one of these would still be the I.T. manager’s salary to manage the numerous devices the company owns. Speaking of maintenance, these devices undergo wear and tear which means that the devices will need parts and maintenance. Lastly, predicted downtime of the devices would cost the company approximately $613 for the year. This would total to $16,158 for the second and the third year, separately.
Alternatives
With the unseen costs above, that’s why some companies are now opting for an alternative, which is renting laptops. Outsourcing services has been a growing trend for the past couple years which makes sense because it is viewed as the more cost-effective solution to most companies. Not having to own the laptops removes the burden of incurring the unseen costs for the company. Imagine this, you pay a clear fee in order to be able to utilize a laptop, maintenance and repairs are already covered by the lessee of the devices. Some companies like TechUp even offer loaner laptops in the event that the devices are in need of repairs, to avoid down time of the employees.
How does renting lower my costs?
If we would compare the costs of renting laptops instead of purchasing side-by-side, we would see something like this.
Up front costs
One of the main differences between renting and purchasing is that the costs to acquire laptops will of course be way lower than purchasing. Renting a $1090 laptop would approximately cost your company $65 per month only. Another main difference is that the maintenance and parts of these devices will be shouldered by the lessee, this means that your company will be saved from these costs.
Operational upkeep
One of the value’s as well of renting is that the business does not have the challenge of managing the devices, and in some cases, even saves the business from acquiring and paying for an I.T. manager. In terms of downtime, some companies, like TechUp, even offer loaner devices when these laptops need to be repaired.
Seen above would be the side-by-side comparison of renting versus buying. It would start to make a lot more sense now why some companies prefer to rent instead of acquiring laptops through purchasing. Renting would save the company a hefty 58% in the first year. Renting laptops releases the business from the burden of the hidden costs associated with purchasing laptops.
Seen above would be the comparison for the second year and the third year. Even though the company did not purchase laptops for these years, renting would still be cheaper. Since renting would typically have lighter workload for the I.T. department, the business would not have a high demand for an I.T. manager.
Conclusion on hidden costs of laptops
When acquiring laptops, companies have to be aware that the expenses don't stop there. Maintenance, repairs, down times are unseen costs that eat up the valuable resources of the company. Companies must be aware about these costs as management or decision makers may not be aware that these are eating up their resources under the shadows. However, if you don’t want the stress and hidden costs that are associated with purchasing these laptops, then we recommend that renting out laptops will be more suitable for your company. This way the company can avoid or lessen these factors, and allow the business to focus on other activities that are more important.
Need rental laptops for your Philippines-based workforce? Contact TechUp today.
